Budget woes could affect local companies

Nonprofit outlines possible impact to area economy if legislated defense cuts kick in next year.

Local businesses could lose millions of dollars — with Nestle USA alone standing to lose more than $144 million — according to a report released recently by a national nonprofit that outlined the potential local economic impact if $500 billion in defense budget cuts are triggered because Congress can’t reach a debt-reduction deal.

More than 65 local companies could be impacted by the 10-year cuts, which are slated to kick in on Jan. 2, 2013, according to the report from the Center for Security Policy.

Nestle, which has its U.S. headquarters in Glendale, provides products to commissaries and exchanges, said company spokeswoman Edie Burge.

“These sales aren’t really ‘defense contracts,’ per se, but could potentially be impacted by defense budget cuts,” she said in a statement.

Another company in Glendale that could be impacted significantly is Glenair Inc. — which provides electrical equipment — has two entries in the report, one for about $4.1 million and the other for $901,648.

Other Glendale companies that could lose more than $1 million if defense budget cuts go through are American Technical Services Inc. with more than $3.2 million, Applied Minds Inc. with about $2.8 million and more than $1.5 million for Sai Industries.

In Burbank, six companies could lose more than $1 million, according to the report.

Hydro-Aire Inc. tops the list with almost $19.7 in contracts, followed by Senior Operations, which could lose out on about $3.6 million.

Other Burbank companies that could see more than $1 million in losses are Hydra-Electric Co. with about $2.4 million, Karagozian & Case with a little more than $2 million, Photo-Sonics Inc. with about $1.4 million and more than $1.3 million for Sysense Inc.

Most of the companies did not return calls to confirm their contract amounts or provide information about the services, products or equipment they provide through their agreements.

A representative for Karagosian & Case did confirm the company’s amount and said the firm provides software and engineering consulting services to the government.

Rep. Adam Schiff (D-Burbank) said he doesn’t think the cuts will take effect because Congress will reach some type of agreement by either trying to bundle the many economic problems facing the country in “one big ugly package,” or “kick the can” into the future.

Schiff said he hopes Congress doesn’t take the latter route because it wouldn’t address the serious financial problems that plague the nation.

“These are self-inflicted wounds that our country doesn’t need,” he said during a recent meeting with representatives of the Glendale News-Press and Burbank Leader.

In La Cañada Flintridge last week, Schiff blasted the ongoing partisan infighting that he said has put a stranglehold on Congress and could lead to another recession.